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Distillers say cheers to lowering of duty barrier in India
Monday, 03 March 2003, 20:30 IST
NEW DELHI: Foreign distillers, who have been invading India in recent years with a view to slake the thirst of its growing middle class, Friday welcomed the government move to lower duties on import of spirits.
Presenting the national budget for 2003-04 to Parliament, Finance Minister Jaswant Singh said the basic customs duty rate lowered from 182 percent to 166 percent.
"Reduction in basic customs duty is definitely a welcome step," said Dinesh Jain, managing director of Highland Distillers.
Srikant Illuri, chief executive officer of Allied Domecq, said: "The government is bound to reduce the customs duty on imported liquor as per the World Trade Organisation regulations.
"Therefore, the reduction in customs duty from the prevailing 182 percent to 166 percent was expected."
Illuri said the rationalisation and reduction of additional duty from the existing 50 percent to 25 percent for cased products valued over $40 would provide consumers wider choice at more attractive prices.
According to the Scotch Whisky Association, one of the largest lobbying groups for Scotch producers and distillers globally, the duty cut would allow a host of foreign firms to bring their products within the reach of India's growing middle class.
India's wine industry is estimated at about 400,000 cases a year. The locally made wines that are priced below 
150 per bottle drive the volume in the sector.
The total federal duty burden on imported bottled spirits and wines ranges between 340 percent and 413 percent, limiting the access of foreign liquor firms to the Indian market.
Despite stiff duties, international liquor firms such as Seagram, Bacardi, Allied Domecq, Guinness UDV, LVMH Moët Hennessy Louis Vuitton and Italian winemaker Giacomini Company have rushed to India since the liberalisation of the early 1990s.
Analysts say the foreign distillers are making a beeline to India because the country of over one billion people is a tantalising market for alcoholic beverage firms, which look to Asia for growth because sales have stagnated in major markets.
The foreign companies, however, face stiff competition when it comes to selling their alcoholic beverages produced overseas from well-entrenched Indian companies whose products are much cheaper.
India consumes about 80 million 12-bottle cases of spirits a year, but official imports account for less than one percent of consumption, according to the Scotch Whisky Association.
Source: IANS
150 per bottle drive the volume in the sector.
The total federal duty burden on imported bottled spirits and wines ranges between 340 percent and 413 percent, limiting the access of foreign liquor firms to the Indian market.
Despite stiff duties, international liquor firms such as Seagram, Bacardi, Allied Domecq, Guinness UDV, LVMH Moët Hennessy Louis Vuitton and Italian winemaker Giacomini Company have rushed to India since the liberalisation of the early 1990s.
Analysts say the foreign distillers are making a beeline to India because the country of over one billion people is a tantalising market for alcoholic beverage firms, which look to Asia for growth because sales have stagnated in major markets.
The foreign companies, however, face stiff competition when it comes to selling their alcoholic beverages produced overseas from well-entrenched Indian companies whose products are much cheaper.
India consumes about 80 million 12-bottle cases of spirits a year, but official imports account for less than one percent of consumption, according to the Scotch Whisky Association.
Source: IANS